Today, we have something a different… our first guest blogger: a former client who shares her perspectives on her journey into, through and out of bankruptcy.
Archive for February, 2010
Talking to the Kids: Dealing with Failure
Wednesday, February 24th, 2010
As you can see, in the title I use the “F” word. Now, I want to point out that by using the “F” word, I’m not saying that you – as a parent deep in debt – are a failure. Yet talking to your kids might raise some concerns that you have about how they might perceive you – and the choices you have made. And that’s the tough road I’m going to talk about today. (more…)
Kids Aren’t Stupid (Really)
Tuesday, February 23rd, 2010
That’s a heck of a title, eh? It does however, encapsulate the theme of today’s thoughts on talking to kids about the debt the family finds itself in. Just because you’re not talking about the debt issues you as a parent are struggling with does not mean that the kids don’t know – or sense something is terribly wrong. (more…)
Talking to your Kids
Monday, February 22nd, 2010
Recently, when I was talking to a client she expressed her concerns about her kids finding out how bad the household finances are. It’s not the first time I’ve heard clients express those concerns to me. And when parents are facing some real tough decisions, there are no easy answers I can provide. Yet when it comes to having to talk to kids about the debt problems that affect the household, isn’t it important to talk to them? In this series, I’ll be sharing much of my own observations in speaking with clients, in speaking with colleagues, and in some cases, in speaking with and learning from kids. (more…)
Loan Modification Scams
Friday, February 19th, 2010
As more and more people try anything to avoid losing their homes, more and more people are getting scammed.
Here are two links with important information for homeowners contemplating modifications:
This from The Christian Science Monitor:
TransUnion, a credit reporting company, released its own numbers on Tuesday. At the end of the fourth quarter last year, it said, 6.89 percent of all US mortgage payments were at least 60 days past due. That was an all-time high.
Enter unscrupulous loan-modification companies. They advertise on late night-television or radio shows and sound as if they are linked to the Obama program.
“Many of them have the word ‘hope’ in their phone number,” says Jonathan Mintz, commissioner of the Consumer Affairs Department in New York. “But it’s a false hope.”
And here’s a link mentioned in the same article that describes, among other things, 6 Facts You Should Know About Loan Modification Scams.
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CareOne: What’s Behind Those Commercials?
Thursday, February 18th, 2010
As I was watching the news the other night, I saw this commercial for CareOne Credit. The name rang in my head – and then it hit me: I had recently read about them in a case while doing some research Since the judge’s observations in that case and his comments were stuck in my head – and since I am seeing these commercials more and more - I thought I would share them here.
The Case
In late 2006, Debra Wood was struggling with debt – and after apparently seeing an ad, she contacted CareOne Credit Counseling. When she contacted CareOne, she was referred to Consumer Law Associates, LLC (CLA). CLA then gave her documents to start her into a debt management plan – which would be administered by Ruther and Associates, LLC (RA). They describe themselves as a “national law firm dedicated to consumer debt reduction.” As the facts of this case unfold, you’ll see what that description is inaccurate – at best.
Families Fighting About Debt
Thursday, February 11th, 2010
Lately, I’ve been hearing a lot – and I mean a lot – about the stress that finances (and the lack thereof) is taking on families. I’m hearing about spouses sleeping on couches or in basements. I’m hearing from couples that are fighting and contemplating divorce. And I’m hearing from people who have gone through a divorce because of the household finances and they are trying to find a way to move on.
Today, this blog is for all of those families who find that joy and laughter have been replaced with debt and strife. (more…)
IRS Form 1099-C: Discharged Debt is NOT Income
Wednesday, February 10th, 2010
If you settle a debt for a certain amount of money, the amount you don’t have to pay is “forgiven.” Using a really simple example, if you have a $10,000 debt, and you settle it for $5,000, the creditor has forgiven the remaining $5,000.
Creditors are known to file IRS Form 1099-C on that forgiven debt. As I’ve mentioned here when discussing debt settlement, that forgiven amount can be considered income. Tax liability on that amount is something to be considered in determining the affordability of a debt settlement.
If debts are discharged in bankruptcy, is that considered income? No.
But if that’s the case, why am I hearing from reliable sources that debtors all over the country are receiving IRS Form 1099-Cs from former creditors? What’s going on? And what can YOU do about it?
When Should You Start Thinking About Doing a Short Sale?
Tuesday, February 9th, 2010
A homeowner decides that they want to sell their property – and get as much as they can from the sale even though it won’t pay the mortgage – by a short sale. But if the home is already in the foreclosure process, is it already too late to start thinking about that. It might be. Today, I’ll tackle the timing of the short sale decision, and why it something that if you’re going to consider it, you need to start thinking about it before you start missing those mortgage payments.
Short Sales & Foreclosure: Perception & Reality
Monday, February 8th, 2010
Many people struggling to pay the mortgages are motivated to consider a short sale. I am often told that it is considered because of their concern that if a short sale is not done, and the property is allowed to foreclosure, they will never be able to own a home again. Today, I want to tackle the perception of that…and present a bit of reality, from my point of view.